November 07, 2024
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Ports deal worried Coast Guard

WASHINGTON – Citing broad gaps in U.S. intelligence, the Coast Guard raised concerns weeks ago that it could not determine whether a United Arab Emirates-based company seeking a stake in some U.S. port operations might support terrorist operations.

The disclosure came during a hearing Monday on Dubai-owned DP World’s plans to assume significant operations at six leading U.S. ports. It also clouded whether the Bush administration’s agreement to conduct an unusual investigation into the pending takeover’s security risks would allay lawmakers’ concerns.

The administration said the Coast Guard’s concerns were raised during its review of the deal, which it approved Jan. 17, and that all those questions were resolved. London-based Peninsular & Oriental Steam Navigation Co. now handles the port operations.

“There are many intelligence gaps, concerning the potential for DPW or P&O assets to support terrorist operations, that precludes an overall threat assessment” of the potential merger, an unclassified Coast Guard intelligence assessment said.

“The breadth of the intelligence gaps also infer potential unknown threats against a large number of potential vulnerabilities,” said the half-page assessment. Officials said it was an unclassified excerpt from a larger document.

In a statement, the Coast Guard said the concerns reflected in the excerpt ultimately were addressed and that other U.S. intelligence agencies answered the questions raised. The Coast Guard assessment raised questions about the security of the companies’ operations, the backgrounds of people working for the companies, and whether other foreign countries influenced operations that affect security.

“We were never told about this and have no information about it,” Michael Moore, DP World’s senior vice president, said of the excerpt. However, he said it shows “serious and probing” questions were asked and that the initial approval of the deal indicates those questions were answered.

Sen. Susan Collins, chairwoman of the Senate Homeland Security Committee, released the excerpt at a briefing Monday. The Bush administration agreed Sunday to DP World’s request for a 45-day investigation of potential security risks related to the deal. The government did not do such an investigation before approving the deal, even though, critics say, the law required it.

“I am more convinced than ever that the process was truly flawed,” Collins, R-Maine, said after the classified portion of the briefing. “I can only conclude that there was a rush to judgment, that there wasn’t the kind of painstaking, thorough analysis that needed to be done, despite serious questions being raised and despite the involvement of a wide variety of agencies.”

Congressional leaders who brokered the arrangement for the investigation hoped it would defuse a bipartisan political uproar over port security and scuttle any push for legislation this week that would force such an investigation and could embarrass President Bush.

Senators introduced several bills Monday anyway, even though Senate Majority Leader Bill Frist told reporters in Detroit, “I don’t think it’s necessary to legislate.”

Criticism persisted from both Republicans and Democrats.

“This report suggests there were significant and troubling intelligence gaps,” said Collins. “That language is very troubling to me.”

Appearing before the Collins committee, administration officials defended their decision not to trigger a 45-day review of national security implications of the business transaction after their initial review.

“In this case, the concerns that you’re citing were addressed and resolved,” Clay Lowery, the Treasury Department’s assistant secretary for international affairs, told Collins. “There were no national security concerns that were not addressed.”

The Coast Guard indicated to The Associated Press that it did not have serious reservations about the ports deal on Feb. 10, when the news organization first inquired about potential security concerns.

Stewart Baker, an assistant secretary for the Homeland Security Department, told lawmakers that the excerpt was from an internal Coast Guard document that he did not see. However, Baker said the Coast Guard had indicated to the interagency panel that reviews such transactions that the security concerns it had ultimately had been resolved.

“It communicated to us that it had no further concerns about the transaction,” Baker said.

“I think it’s a little unfair to judge this report by one paragraph that happens not to be classified,” Baker said. “This paragraph is not really representative of the entire report.”

“I think the paragraph speaks for itself,” Collins responded before adjourning the public hearing for the closed session to explore the issue further.

The Bush administration defended its plans to conduct a highly unusual second review of a business deal it has already approved. It acknowledged that in some cases, the same officials who previously judged the agreement will serve on the new investigation by the multiagency Committee on Foreign Investments in the United States.

The White House said Bush remains unconvinced the outcome will be any different. “The president has made his views very clear, and they remain unchanged,” spokesman Scott McClellan said.

At the Treasury Department, which manages the committee, spokesman Tony Fratto said the broader 45-day investigation will result in a report submitted to the president, who will have 15 days to decide whether to approve the deal. Fratto said Treasury Secretary John Snow and other Cabinet secretaries will be directly involved.

“This is a new review and we will look at it with open eyes in terms of the national security implications,” Fratto said.

Also Monday, a bipartisan group of senators introduced a bill that would delay the deal and give Congress an opportunity to block the takeover. The group did not plan to push for a vote yet.

Sen. Charles Schumer, D-N.Y., said the Coast Guard assessment reinforces the need for a thorough review of security issues. “If this isn’t a smoking gun, it shows that there may be one undetected” by the interagency panel that did the initial review, Schumer said.

Other Democrats introduced legislation to ban companies owned by foreign governments from controlling operations at U.S. ports. At the White House, governors from across the country met privately with Bush, and several participants said the ports issue was brought up.

The Justice Department said the Bush administration’s decision to investigate potential security risks in the DP World deal renders irrelevant the state of New Jersey’s federal lawsuit aimed at blocking the company from assuming operations at the Port Newark container terminal.

Associated Press writers Ted Bridis, Mark Sherman and Donna de la Cruz contributed to this report.


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